Exam 6: Merchandising Activities

Emerald Co.uses a perpetual inventory system and records purchases of merchandise at net cost.The company recently purchased 200 compact discs at an invoice price of $6,000 and terms of 2/10,n/30.Half of these discs had been mislabeled and were returned immediately to the supplier.The journal entry to record payment of this invoice after the discount period has expired will include a:

Journal entries for merchandising transactions Shown below is a partial chart of accounts for Main Street Markets,followed by a series of merchandising transactions.The company uses a perpetual inventory system,records purchases at net cost,and records sales at the full invoice price.Sales taxes are collected on all sales,and the sales tax liability is recorded immediately.Freight charges on inbound shipments are recorded in the Inventory account. Indicate the accounts that should be credited in recording each transaction by placing the appropriate account number(s)in the space provided.

In a periodic inventory system,the cost of goods sold is:

The credit term 2/10,n/30 means:

[The following information applies to the questions displayed below.] Washington Warehouse is a small retail business that specializes in the sale of top-of-the-line televisions.This year,the store has begun to carry the Flat TV manufactured by Bass Co.Thus far,Washington has recorded the following transactions involving the Flat TV: -If Washington uses a perpetual inventory system,the journal entry to record the sale on February 12th would include all of the following except:

Hicksville's Department Store uses a perpetual inventory system.At year-end,the balance in the Inventory control account is $1,200,000.Assuming that the inventory records have been maintained properly,a year-end physical inventory:

[The following information applies to the questions displayed below.] Bremmer uses a periodic inventory system and the following information is available: -What is the cost of goods sold?

Inventory systems Bookmarks,Inc.sells used books at its store in the resort community of Lake Bryn Mawr.The owner maintains a large inventory of used books purchased from estate sales,flea markets,and customers.During the tourist seasons of summer and winter,the store is exceptionally busy with customers.Each customer usually makes small purchases ranging in amount from one to twenty dollars.What type of inventory system would you recommend to the owner of Bookmarks,Inc.? Explain the reasoning behind your advice.

Which of the following factors would suggest the use of a periodic inventory system?

Wholesalers buy from retailers and sell to the general public.

Inventory shrinkage is not caused by:

In a periodic inventory system,a complete physical inventory must be taken at year-end in order to compute the amount of purchases made during the period.

If cost of goods sold is $360,000 and the gross profit rate is 40%,what is the gross profit?

Periodic inventory system Soundview Centre uses a periodic inventory system.At the end of 2018,the accounting records include the following information: Compute the following for 2018:

[The following information applies to the questions displayed below.] Washington Warehouse is a small retail business that specializes in the sale of top-of-the-line televisions.This year,the store has begun to carry the Flat TV manufactured by Bass Co.Thus far,Washington has recorded the following transactions involving the Flat TV: -If Washington uses a perpetual inventory system,the journal entry to record the purchase on January 18th would include which of the following?

Gross profit The table below contains information from a recent annual report of Molloy,Inc.(Dollar amounts are stated in millions. )Fill in the missing amounts.

Merchandising companies that are small and do not use a perpetual inventory system may elect to use:

Which of the following companies would be most likely to use a perpetual inventory system?

Perpetual inventory system: transactions and closing entries Danny's Wholesale Company uses a perpetual inventory system.A partial chart of accounts is shown below,followed by a series of merchandising transactions.Indicate the accounts that should be debited and credited in recording each transaction.(Ignore sales taxes. )

The cost of delivering merchandise to the customer is: